Germany to Raise Taxes on Spirits and Sparkling Wine by 20%

The German flag flutters on a campsite May 27, 2017, at the Ruhr in Muelheim an der Ruhr, Germany. (Photo: Ralf Hirschberger/picture-alliance/dpa/AP Images)

Germany plans to raise taxes on spirits, sparkling wine and “alcopops” (low-ABV ready-to-drink cocktails) by 20% starting in 2027 as the government seeks to increase revenue and offset healthcare costs, according to Reuters.

The increases are part of a broader tax push that also includes higher tobacco duties and a new levy on sugary soft drinks. Beer and still wine will be exempt from the planned alcohol tax increases.

The government expects the new duties on spirits, sparkling wine and alcopops to generate hundreds of millions of euros in additional revenue. The measures come as Germany looks to offset cuts to federal health insurance subsidies.

Sugary Drinks Face New Tax

Germany’s cabinet approved a sugar tax on soft drinks on Oct. 14, with the levy scheduled to take effect in July 2027.

Drinks containing at least five grams of sugar per 100 milliliters will face a tax of €0.26 (29 cents) per liter. Products with higher sugar content will be taxed at €0.32 (36 cents) per liter.

The finance ministry expects the levy to generate €690 million ($775 million) in 2027 and €925 million ($1.04 billion) in 2028. It estimates that sugary drink consumption contributes about €2.1 billion in annual healthcare costs.

Tobacco Taxes Also Increase

Lawmakers approved a sharp increase in tobacco taxes on Oct. 15. The measure is expected to raise more than €12 billion ($13.5 billion) between 2027 and 2030 and push the average price of a pack of cigarettes above €11 ($12.40) by the end of the decade.

Opposition parties criticized the increase, warning that higher prices could place an additional burden on consumers and fuel the black market.

The measures reflect a broader approach among governments using taxes on tobacco, alcohol and sugary drinks to raise revenue and influence consumer behavior.

Germany’s sparkling-wine duty, known as Sektsteuer, dates to 1902 and has remained in place through successive governments and major political upheavals. The latest increase will raise the cost of another long-established tax on alcoholic beverages.